Determining the True Cost to Deliver Total Hip and Knee Arthroplasty Over the Full Cycle of Care: Preparing for Bundling and Reference-Based Pricing

J Arthroplasty. 2016 Jan;31(1):1-6. doi: 10.1016/j.arth.2015.07.013. Epub 2015 Jul 11.


The Affordable Care Act accelerates health care providers' need to prepare for new care delivery platforms and payment models such as bundling and reference-based pricing (RBP). Thriving in this environment will be difficult without knowing the true cost of care delivery at the level of the clinical condition over the full cycle of care. We describe a project in which we identified true costs for both total hip and total knee arthroplasty. With the same tool, we identified cost drivers in each segment of care delivery and collected patient experience information. Combining cost and experience information with outcomes data we already collect allows us to drive costs down while protecting outcomes and experiences, and compete successfully in bundling and RBP programs.

Keywords: TDABC; cost drivers; payment models; shadowing; total joint replacement; value.

MeSH terms

  • Arthroplasty, Replacement, Hip / economics*
  • Arthroplasty, Replacement, Knee / economics*
  • Costs and Cost Analysis
  • Delivery of Health Care / economics
  • Health Care Costs / statistics & numerical data*
  • Humans
  • Patient Care Bundles / economics*
  • Patient Protection and Affordable Care Act / economics
  • United States